MONDI SEAT R/BAY Final

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MONDI SEAT R/BAY Final www.mondibp.com CONTENTS EXECUTIVE SUMMARY .................................................................................................. 2 1 INTRODUCTION.................................................................................................... 5 1.1 BACKGROUND......................................................................................................................... 5 1.2 STRUCTURE OF THIS REPORT ............................................................................................... 5 2 OBJECTIVES AND APPROACH............................................................................ 6 2.2 OBJECTIVES OF THE SEAT PROCESS .................................................................................... 6 2.3 METHODS OF DATA COLLECTION .......................................................................................... 6 3 OVERVIEW OF THE MONDI BUSINESS PAPER RICHARDS BAY OPERATION.... 7 3.1 THE RB720 PROJECT .............................................................................................................. 7 3.2 EXISTING SOCIAL MANAGEMENT SYSTEMS AND INVESTMENT........................................... 9 3.3 COMPLIANCE WITH ANGLO AMERICAN CORPORATE POLICY REQUIREMENTS ................. 10 4 OVERVIEW OF NEIGHBOURING COMMUNITIES ............................................... 13 4.1 URBANISATION LEVELS AND ADMINISTRATIVE STRUCTURES.............................................. 13 4.2 DEMOGRAPHIC CHARACTERISTICS....................................................................................... 13 4.3 ECONOMIC CHARACTERISTICS.............................................................................................. 14 5 SOCIAL AND ECONOMIC IMPACTS.................................................................... 15 5.1 INTRODUCTION........................................................................................................................ 15 5.2 EMPLOYMENT.......................................................................................................................... 15 5.3 TAXES AND ROYALTIES ........................................................................................................... 15 5.4 LOCAL PROCUREMENT SPEND.............................................................................................. 16 6 KEY ISSUES RAISED BY STAKEHOLDERS......................................................... 17 6.1 INTRODUCTION........................................................................................................................ 17 6.2 POSITIVE IMPACTS FROM MONDI BUSINESS PAPER RICHARDS BAY.................................. 17 6.3 AREAS OF CONCERN AND NEGATIVE IMPACTS .................................................................... 18 7 MANAGEMENT RESPONSES TO ISSUES RAISED............................................. 20 7.1 MANAGEMENT RESPONSES................................................................................................... 20 8 ASSESSMENT OF MANAGEMENT MEASURES, OPPORTUNITIES AND NEXT STEPS................................................................................................. 26 8.1 INTRODUCTION........................................................................................................................ 26 8.2 MAIN AREAS FOR PRIORITISATION......................................................................................... 26 8.3 NEXT STEPS............................................................................................................................. 27 GLOSSARY & ENQUIRIES ........................................................................................................ 27 ANNEXURE A ..................................................................................................................................................... 28 1 SOCIO-ECONOMIC ASSESSMENT REPORT I RICHARDS BAY EXECUTIVE SUMMARY OVERVIEW OF THE EXISTING SOCIAL OPERATION AND MANAGEMENT SYSTEMS NEIGHBOURING COMMUNITIES Mondi Business Paper employs dedicated social manage- The Mondi Business Paper South Africa Richards Bay mill ment and corporate social responsibility staff. Within (MBPSA RBM) is located in Richards Bay, on the north east Mondi, social management relates to employees’ chil- coast of South Africa. It produces around 221 tonnes of dren’s education, sports and recreation, employee volun- Baywhite paper and 375 tonnes of pulp per year. It is tary activity and organisation of company events. located in the vicinity of uMhlathuze City Municipality, where some of the biggest companies in the country are located, such as BHP Billiton, Ticor SA, RBCT, and Bell Equipment. COMMUNITY SOCIAL INVESTMENT uMhlathuze has an estimated population of around Outside of the company, the Richards Bay mill has sought 450,000, 72% of which is rural. The majority (64%) of the to tackle issues such as HIV/AIDS in the community, small population in the area is in the economically active age business development, education and training (with an group, and there is mixed ethnicity in the area. emphasis on infrastructure and career development) and Agriculture accounts for around 24% of economic activity improving sports and education. in the uMhlathuze Municipality, while the services sector Educational grants, HIV/AIDS health care and health accounts for 19%, and manufacturing for 18%. However, education and first aid kits have been provided to commu- agriculture contributes only 5% of output in the area, while nities at a cost of around R652,300 (US$100,400) per manufacturing accounts for 55%. In Richards Bay, income year. Investment is also made in participation in staff is relatively evenly distributed. This is also the case in events and on promotional activities, including trade fairs, Empangeni, but in Nseleni and Esikhawini, which also lie golf days and on certain environmental issues. within uMhlathuze Municipality, the majority of people lie in the lowest income-earning bracket of below The Richards Bay mill helps the small business community R400 (US$62)1 per month. by providing benefits and self-help assistance, training and purchasing from disadvantaged companies. IMPACTS AND ISSUES IDENTIFIED BY THE OPERATION PERFORMANCE AGAINST Application of the SEAT process highlighted a number of ANGLO CORPORATE POLICY positive and negative impacts that Mondi Business Paper In terms of compliance with Anglo American corporate has on the local communities. An important impact is policy requirements, a management self-assessment employment creation: The Richards Bay mill employs over confirms that the Richards Bay mill generally performs 900 people directly, and around 650 contractors. It also well, with action having been taken in each policy area. In accounts for another 160 people through induced employ- terms of responsibility to stakeholders, the mill has estab- ment. About 90% of all employees are hired from the local lished a formal complaints procedure as well as a communities. Community Liaison Forum and stakeholder workgroups. Besides employment, the Richards Bay mill pays around In terms of principles of good conduct, MBPSA RBM has R262 million (US$40.3 million) in taxes per year, and also performed well, but in the area of employment and R78 million (US$12 million) on expenditure of local supplies. labour issues, more needs to be done. The Richards Bay This makes the mill a very important contributor to the local mill has also performed very well against SHE policy and economy. Annual expenditure on benefits for employees against management principles, most of which have been totals approximately R39 million (US$6 million), while addressed in the Turnbull Report. expenditure on additional benefits such as employee education and the Employee Development Programme totals around R1 million (US$155,480) per annum. 1 Comparative values are calculated at R/US$ exchange rate of 6.5. 2 SOCIO-ECONOMIC ASSESSMENT REPORT I RICHARDS BAY ISSUES RAISED tatives at the Richards Bay mill. Employees are unhappy BY STAKEHOLDERS with the management style, which is perceived to be very top-down, with lack of engagement or feedback mecha- Meetings and consultations were held with internal stake- nisms between employees and management. Employees holders (management, the CSR department, employees, and unions perceive that a performance management and union representatives and contractors) and external stake- monitoring system in place, with a lack of clear criteria for holders (representatives from the community, including promotion. This has led to a feeling of lack of acknowledge- local schools and school governing bodies, uMhlathuze ment and recognition. Employees and their union represen- City Municipality, the University of Zululand Science tatives also feel that although the company is in the process Centre, the Clean Air Association and an NGO). of transition, this is not at all evident. Employees also feel that any training offered does not allow for promotion or A clear message emerging from interviews is that there is changing positions. Furthermore, employees feel that a high level of dissatisfaction among employees and their although education assistance is offered to employees, union representatives at the Richards Bay mill. On the there is a perception that this is open only to management other hand, observations from external stakeholders were and their families. generally favourable and it is clear that, besides some negative perceptions regarding environmental perform- ance and emissions,
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